CALIFORNIA LAW NEEDED ON SUPERSTORES.

Byline: RICHARD ALARCON

ANYONE who has walked down a Wal-Mart aisle knows that the store's prices are hard to beat. I am certainly not against low prices. However, we must be careful to ensure that we do not sacrifice well-paying jobs and increase tax burdens when we allow superstores to come into our communities. Careful planning is key to ensuring that the aggressive expansion plans in our state by one of the nation's most profitable companies don't hurt California workers and taxpayers in the long run.

The Center for Labor Research at the University of California at Berkeley documented the hidden costs to the California taxpayer that are created by Wal-Mart's low wages and inadequate benefits. This discussion of hidden costs has stirred up much controversy. Wal-Mart pays its employees far less than other large retailers pay their employees in California, and taxpayers are often left to pick up the difference. That's fact, not assumption. Using the findings based on employment data that Wal-Mart was forced to turn over during its sex-discrimination litigation, UC Berkeley economists conclude that this year Wal-Mart is lagging 30 percent behind potential competitors in wages.

The low pay and benefits packages create the need for Wal-Mart's workers and their families to get $86 million annually in public assistance in programs like Medi-Cal and food stamps. Taxpayers paid an average of $1,952 per each low-wage Wal-Mart worker. That's a whopping 40 percent more than needed from taxpayers for workers of other California retailers.

Of course Wal-Mart and its supporters are disputing the findings, but their arguments are simply wrong. Take, for instance, the claim that Wal-Mart provides jobs to otherwise unemployed workers who, without those jobs, would be drawing down many more public resources. What they fail to calculate are the store closures caused by Wal-Mart, especially when its new store is a Wal-Mart Supercenter - a superstore or megastore that sells a substantial amount of groceries in addition to regular retail items.

Data show that for each new Wal-Mart superstore, at least two supermarkets close down. In addition, many small local and independent stores are forced to shut their doors when a Wal-Mart superstore comes into town.

In other words, Wal-Mart is both a job creator and a job killer. Often superstores kill better jobs than they create. That's a dangerous trend. As the UC study documents, if other large retailers in California paid Wal-Mart wages and curtailed health coverage down to Wal-Mart levels, California's workers would become poorer, and taxpayers would be stuck with paying an additional $410 million in subsidies every year.

Another argument marshaled by supporters of superstores is the unsupported claim that they bring in sales revenue to the state and counties. But there is little evidence that a superstore actually adds to sales revenue if it is allowed to displace other retailers.

Local governments need to know the facts, and that's what my proposed legislation does. SB 1056 does not ban Wal-Marts or Wal-Mart Supercenters. It would simply require that any retailer that wants to build a superstore pay for an independent economic impact report when applying for a building permit in any city in California. Local governments would still be able to approve or disapprove of superstores, but they would do so armed with important information about how their area, their small businesses and their workers would be affected.

I'm pleased that this concept has been approved as a Los Angeles city ordinance. But a piecemeal approach isn't enough. Cities need a uniform state law to level the playing field. Without such a law, corporations can simply move from town to town looking for municipal leaders who are so enticed by potential sales tax revenues that they don't fully investigate the long-term effects.

Getting all the facts before making important decisions is just common sense. It's the same way you buy a car, choose a home or pick a school. You weigh the pros and the cons and make an informed decision. This legislation, which has passed through both the state Assembly and the state Senate and is currently on the governor's desk, is simply good public policy.